chapter 13 ec strategy, globalization, and sme s
TRANSCRIPT
Chapter 13EC Strategy, Globalization, and
SMES
Learning Objectives1. Understand the essentials of online business
competition and strategy and how the Internet and EC influence Porter’s Five Forces model.
2. Describe the performance and strategy cycle.3. Describe the strategy initiation phase. 4. Understand the activities of strategy formulation. 5. Understand the strategy implementation phase.
Learning Objectives6. Describe strategy assessment, including the role
of metrics.7. Describe performance improvements and
innovations in e-commerce.8. Evaluate the issues involved in global EC.9. Describe how small and medium-sized
businesses can use EC.
Organizational Strategy: Concepts
and Overview• *Strategy• Strategy in the Web Environment• Porter’s Five Forces Model and
Strategies as Influenced by the Internet and EC1. Threat of entry of new competitors2. Bargaining power of suppliers3. Bargaining power of customers or buyers4. Threat of substitute products or services5. Rivalry among existing firms in the industryo Strategies for Gaining Competitive
Advantage
Porter’s Five Forces Model
Organizational Strategy: Concepts
and Overview• The Impact of the Internet• Strategic Planning for IT and EC
The Strategy and Performance Cycle and
Tools• Strategy and Performance Cycle and
Tools• *Strategy Initiation—Goals
o Improved performanceo Gain of competitive advantageo Increased sales and revenueo Improved customer and partner service and
relationshipso Generation of new business models and
facilitating innovation
The Strategy-Performance Cycle
The Strategy and Performance Cycle and
Tools• *Strategy Formulation
o Specific activities and outcomes from this phase include:• Business opportunities• Cost–benefit analysis• Risk analysis, assessment, and management• Business plan
• *Strategy Implementationo The major specific activities and outcomes from this
phase include:• Project planning• Resource allocation• Project management
The Strategy and Performance Cycle and
Tools• *Strategy Assessment• Performance Improvement and
Innovations• Major Tools for Strategic Planning
E-Commerce Strategy Initiation
• Representative Issues in E-Strategy Initiation in
E-commerceo First-Mover Advantageo Managing Channel Conflict and
Disintermediation• *Disintermediation
o Price Conflict and Its Managemento Separating Online and Offline Operations
• Brand Independence
• Strategy in the Web 2.0 Environment and in Social Networking
E-Commerce Strategy
Formulation• Selecting E-Commerce Opportunities• Determining an Appropriate EC
Application Portfolio Mixo The BCG Model and an Internet Portfolio
Mapo The Viability-Fit Model
• Risk Analysis in Strategy Formulationo *E-Commerce risk
• Collaborative Efforts in Strategy Formulation
The Internet Portfolio Map
Sources: Based on Tjan (2001), Sones (2001); and the authors’ experiences
E-Commerce Strategy
Formulation• Security Issues to Consider During
Strategy Formulation• Other Issues in E-Commerce Strategy
Formulationo Managing Conflict Between the Offline
and Online Businesseso Pricing Strategy
• *Cost-plus
o Multichannel Strategyo Acquisitions, Partnerships, Joint Venture,
and Multi EC Model Strategy
E-Commerce Strategy
Implementation• E-Commerce Strategy Implementation
Processo Find a Champion
• *Project champion
o Start with a Pilot Projecto Allocate Resourceso Manage the Project
• E-Commerce Strategy Implementation Issueso Build, Buy, or Rent EC Elementso Outsource: What? When? To Whom?
• *Outsourcing• Software-as-a-Service
E-Commerce Strategy
Implementation• Redesigning Business Processes: BPR
and BPMo *Business process reengineering (BPR)o *Business process management (BPM)o Change Management
E-Commerce Performance Assessment
• The Objectives of Assessmento Measure the extent to which the EC strategy and
projects are delivering what they are supposed to deliver.
o Determine if the EC strategy and projects are still viable in the current changing business environment.
o Reassess the initial strategy in order to learn from mistakes and improve future planning.
o Identify failing or lagging projects as soon as possible, and determine why they failed or lagged to avoid the same problems in the future.
E-Commerce Performance Assessment
• The Performance Assessment Process1. Set up performance metrics.2. Monitor the performance of the business.3. Compare the actual performance to the
metrics.4. Conduct an analysis using analytics, including
Web analytics.5. Combine the analysis with the methodology of
the Balanced Scorecard.6. Present the results to management in the form
of reports, tables and dashboards.
The Performance Assessment Process
E-Commerce Performance Assessment
• Establish Metricso *Metrico Measurements in Performance Metrics
• *Key performance indicator (KPI)• Intangible variables
o E-Commerce Metrics in Actiono Performance Metrics
• Monitoring Performanceo Monitoring the Social Media Field
• Social Media Monitoring Tools
o *The Balanced Scorecard (BSC)
E-Commerce Performance Assessment
• Analyzing Performance Data• Defining EC Analytics
o Major Types of Analysis
• Web Analytics and Its Major Toolso *Web analyticso Social Media Activitieso *Sentiment Analysis (opinion mining)
Performance Improvement and
Innovation• An Overview of Performance
Improvement• Dashboards in E-Commerce
o What Is a Dashboard?• *Information dashboard
• Innovation for Performance Improvement
Performance Improvement and
Innovation• Innovative Strategies: Some Illustrative
Exampleso Target Corporation o Best Buy o Travelzoo Inc. o Facebook o Apple o Cars.com o Google+o IBM
A Strategy for Global E-Commerce• Benefits and Extent of Global Operations
o Globalization and Social Networking
• Barriers to Global E-Commerceo Cultural Differenceso Language Translation
• Machine Translationo Legal Issueso Geographic Issues and Localization
• Web Localization• Payments in Global EC Trades
o Economic and Financial Issues• E-Commerce in Developing Countries
A Strategy for Global E-Commerce• Breaking Down the Barriers to Global E-
Commerceo Be strategico Know your audienceo Localizeo Think globally, act consistentlyo Value the human toucho Clarify, document, explaino Offer services that reduce trade barriers
E-Commerce Strategy for Small and Medium-sized
Enterpriseso If Judy Can- You Can Too!: The Story of
Blissful Tones Webstore• Globalization and SMES• Resources to Support SME ACTIVITIES IN
EC• SMES and Social Networks
Screen Shot Of Blissfultones.Com
Managerial Issues1. What is the strategic value of EC to the
organization? 2. How do you relate the EC activities to business
objectives and metrics? 3. Should the EC activities in a brick-and-click
company be organized as a separate entity? 4. How should the e-business scope evolve? 5. What are the benefits and risks of EC? 6. Why do we need an EC planning process? 7. How can EC go global? 8. How do you manage the EC project?
Summary1. Strategy concepts and competitiveness. 2. The strategy-performance cycle and strategy
tools.3. E-strategy initiation.4. Strategy formulation. 5. E-strategy implementation. 6. Strategy assessment. 7. Performance improvement and innovation. 8. Issues in global EC. 9. Small and medium-sized businesses and EC.